The Malaysian ringgit is expected to trade cautiously against the US dollar this week as markets await clearer signals from the Federal Reserve on interest rate trajectories, financial analysts say. The currency has been under pressure amid persistent inflation concerns and shifting expectations for US monetary policy.
Market participants are closely monitoring remarks from Fed officials this week for clues on whether the central bank will maintain its hawkish stance. The ringgit weakened 0.3% against the greenback in early trading Monday, continuing its recent volatility.
‘Asian currencies remain at the mercy of Fed policy expectations,’ said one Kuala Lumpur-based forex strategist who asked not to be named. ‘Until we get more clarity on the terminal rate, the ringgit will likely trade sideways with a bearish bias.’
The currency has lost nearly 6% against the dollar year-to-date, mirroring declines in other emerging market currencies as US Treasury yields climbed. Bank Negara Malaysia has repeatedly stated it will intervene to curb excessive volatility but maintains a market-determined exchange rate policy.
Analysts note that Malaysia’s relatively strong economic fundamentals – including robust trade surpluses and manageable inflation – could provide some support if global risk sentiment improves. However, most expect cautious trading to prevail until the Fed’s June meeting.
Looking ahead, currency traders say the ringgit’s trajectory will depend heavily on whether US inflation data shows meaningful cooling in coming weeks. A hotter-than-expected print could trigger another leg down for emerging market currencies, while moderating prices might allow some recovery.